Redcap to drive cellular IoT connections, says Omdia

  • January 24, 2024
  • Steve Rogerson

The number of cellular IoT connections will reach 5.4bn in 2030, according to research from Omdia.

The cellular IoT ecosystem is poised for significant transformation over the next seven years, driven by the rise of 5G technologies, as revealed by the Omdia research (–2H23-Analysis).

Cellular IoT connections by air interface, 2021 to 2030.

With a predominant focus on 5G redcap, 5G massive IoT and 4G LTE Cat-1bis modules, forthcoming shipments are anticipated to culminate in a 5.4 billion cellular IoT installed base by 2030. This shift underscores the evolving landscape and increasing prominence of cellular connectivity.

The research also found that mass adoption of 5G redcap is set to commence from 2024 onwards with the technology establishing itself as a mid-tier connectivity option for 5G devices that do not require such high specifications as uRLLC and eMBB. It will also enable futureproofing of devices as the industry anticipates the eventual phase-out of 4G beyond 2030.

“2024 will be a pivotal year for 5G redcap growth,” said Alexander Thompson, senior analyst for IoT at Omdia. “This will begin in China, where most volume is expected, and in due course subsidies will bring the module average selling price down to similar pricing as LTE Cat-1.”

The forecast also finds that over 60% of IoT module shipments will come from the Asian and Oceania region, making up approximately 80% of IoT connections in 2023. Notably, the automotive sector emerges as a key driver, and is set to see the largest number of module shipments due to the growing demand for smart vehicles integrating 5G connectivity.

“Across the IoT value chain, application enablement platforms continue to be the leading revenue generator,” said Andrew Brown, practice lead for Omdia’s IoT group. “There remains a role for industry specific, pure-play application enablement platforms despite the exponential growth of hyperscaler offerings and financial constraints for start-ups in the current economy.”

The report highlights the latest trends in the cellular IoT market, providing analysis by region, air interface and application of module shipments, module revenues, connections (installed base) and connectivity revenues.